Filing taxes correctly is not just a compliance requirement — it’s a mark of responsible citizenship and good governance. However, many taxpayers, especially small business owners and first-time filers, often fall into avoidable traps that lead to delays, penalties, or even audits.
Whether you’re managing your taxes personally or helping others comply, here are ten common tax filing mistakes — and how you can avoid them.
1. Incorrect Taxpayer Information
The Mistake:
Misspelled names, wrong TINs, or mismatched registered addresses can cause system errors or invalid filings.
Avoid It:
Always cross-check your BIR Certificate of Registration (Form 2303) and ensure that your name, TIN, and RDO are entered correctly in all forms and platforms (eFPS/eBIRForms).
2. Filing the Wrong Tax Return Form
The Mistake:
Using a 1701 instead of 1701A, or filing a VAT return when you’re registered under percentage tax.
Avoid It:
Know your taxpayer type and registration status. Your COR (Form 2303) will list the applicable tax types and corresponding forms. Consult a registered tax practitioner if unsure.
3. Misclassification of Income or Expenses
The Mistake:
Incorrectly categorizing income as non-taxable or classifying capital expenditures as deductible expenses.
Avoid It:
Review the rules on taxable income and allowable deductions under the NIRC. Capital expenditures like equipment purchases must be depreciated, not fully expensed.
4. Failure to File on Time
The Mistake:
Late filing leads to surcharges, interest, and penalties — even if no tax is due.
Avoid It:
Mark your calendar with BIR deadlines. Consider using online calendars or compliance apps that alert you a few days before due dates.
5. Not Filing a Return Because “There’s No Income”
The Mistake:
Many taxpayers skip filing in inactive months, thinking it’s unnecessary.
Avoid It:
File a “No Payment Return” if there’s no income or tax due — it’s still a legal obligation unless officially deregistered.
6. Overlooking Withholding Tax Obligations
The Mistake:
Businesses forget to file and remit withheld taxes from suppliers, freelancers, or employees.
Avoid It:
Understand which transactions require withholding and ensure timely remittance via Forms 1601-EQ, 1601-FQ, etc.
7. Miscomputing VAT or Percentage Tax
The Mistake:
Errors in input/output VAT computation or missing exemptions and thresholds.
Avoid It:
Keep proper documentation and understand the difference between VATable, Exempt, and Zero-rated transactions. Use the correct rate (12%, 1%, 3%, etc.).
8. Failure to Attach Required Documents
The Mistake:
Missing attachments like SAWT (Summary Alphalist of Withholding Taxes) or audited FS can invalidate the return.
Avoid It:
Check the BIR checklist for every form and attach soft copies when using eFPS or submit physically as required.
9. Disregarding Tax Relief Options
The Mistake:
Taxpayers who are eligible for optional standard deduction (OSD) or special rates forget to elect them — resulting in higher taxes.
Avoid It:
Study your options (OSD vs. itemized deduction) and indicate your election clearly in the appropriate part of the return.
10. Not Keeping Proper Books and Receipts
The Mistake:
Many taxpayers file without a reliable bookkeeping system, leading to inconsistency between returns and records.
Avoid It:
Maintain updated books of accounts (manual, loose-leaf, or computerized) and preserve ORs, invoices, and returns for at least 10 years as required.
Final Thoughts
Tax compliance in the Philippines requires attention to detail and consistent practice. These mistakes may seem small, but they can lead to costly repercussions. By understanding and avoiding these common pitfalls, you uphold your obligations and contribute to a more efficient tax system.
For structured training on tax filing, compliance, and documentation, consider enrolling in our Certified Tax Bookkeeper (CTB) or Certified Tax Compliance Analyst (CTCA) programs.
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